How Washio Works: Business & Revenue Model Explained

What is Washio?

Washio is an on-demand laundry platform facilitating doorstep pick-up and delivery of clothes in major cities of USA. The business model of Washio boosts of picking up dirty clothes from a user’s doorstep, getting them cleaned according to given preferences and delivering them back to customer’s doorstep. The best thing about washio is that all this is done in an impressive turnaround time of just 24 hours.

You’ll be surprised to know that just as Uber has millions of cabs associated with it without owning a single cab, washio too does not own even a single laundry establishment. Washio has tie-ups with local laundries who wash and dry clean clothes for them. The way washio works has not just given citizens a quick and easy way to get their clothes cleaned, but the ease by which the whole business can be managed efficiently has motivated many entrepreneurs to launch on demand laundry platforms in different geographical areas. This post from Juggernaut will take you through the business model of Washio and other important elements like value propositions, revenue model, key problems, their solutions and more.

Founders, Funding Received, Facts and Timeline

Washio, the well known name in on demand laundry industry was launched in March 2013. In just 2.5 years of being into existence, Washio has secured funding amounting to $16.4 Million.

Here are few facts about Washio:

Founders: Juan Dulanto and Jordan Metzner.

Company Headquarters: Los Angeles, USA.

Funding received by Washio: $16.8 Million. (as of September 2015).

Service Area: Los Angeles, Washington DC, Chicago, Boston, Oakland.

Company Valuation: $40 Million (approx).

Number of Users: Over 1,00,000

Washio Revenue: Expected to hit $20 Million by year end.

The following graphic will help you understand the quick growth of Washio.

Salient Features of Washio

Present in 6 major cities of USA.

Enables users to schedule 30 minute time frame for pick-up and delivery.

Enables users to schedule recurring visits to pick up dirty clothes every week or even twice/thrice a week.

Users can choose the detergent to be used and can even give special washing instructions through preference screen while booking their order.

Washio has separate laundry bags for ‘wash and fold’ clothes and ‘dry clean / laundry’ ones. They separate the clothes during pick-up itself.

Washed / Dry cleaned clothes are delivered back to users within 24 hours.

Washio customers receive a series of texts which are sent to them when their order has been booked, when their ninja is on route, when their clothes are ready and again when their ninja is out for delivery.

Washio ninjas offer a cookie to customers in exchange of their dirty clothes while pick-up.

Washio has emerged as a winner when it comes to on-demand laundry. A lot of entrepreneurs and even existing enterprises are eager to follow washio’s business model for their own laundry business. Before we move on to study the entire business model canvas of Washio, let’s take a quick look at value propositions being offered and their customer segments.

Value Propositions

Users can schedule pick up and delivery time.

Washio Ninjas come to user’s doorstep to pick up and deliver clothes.

24 hour turnaround time. Clothes are cleaned and delivered back the next day.

Choice of detergent is offered to users.

Users can give detailed washing instructions.

Tie-up with major laundry establishments in the city.

Dedicated phone and email support.

Customer Segments Explained:

Users

People who want to get their clothes cleaned.

People who don’t want to visit a laundry or a dry cleaner.

People who don’t like washing their clothes themselves.

Pick up & delivery persons

People who want to earn by working as washio ninjas.

People who own a car and have valid driving licence.

Local Laundries

Enterprises that have a tie-up with Washio.

Laundries that wash / dry clean clothes for Washio customers.

Washio ninjas hand over the clothes to take the payments from washio.

Washio Business Model Canvas

The business model canvas of Washio explains company’s key partners, activities, resources, customer relations, value propositions, channels and customer segments of Washio. Along with this, the cost structure and revenue streams of Washio have also been listed. Check it out:

The 4 step model about how Washio works

1. Customer Places Order: Washio has given users the ability to place an order through mobile app as well as its website. Prices for each item have been clearly mentioned for users to know how much would it cost. Users can set up a 30 minute time frame window to schedule pick-up.

2. Washio Ninja Picks up dirty clothes: According to the pick up time scheduled by you, a Washio ninja will drop by at your doorstep. Clothes which require wash and fold are segregated from the ones which require dry cleaning.

3. Clothes are cleaned and packed at a laundry: Depending on your location, your dirty clothes are sent to the nearest laundry that has a tie-up with Washio. It is here that clothes are washed, dry cleaned, ironed etc.

4. Washio Ninja delivers clean clothes: The very next day, Washio Ninjas pick up clean clothes from the laundry establishment and deliver it back to the customer according to scheduled time.

How Washio earns revenue

The revenue model of Washio is quite simple. The company has set standard prices for each item. However these prices may differ from one city to another. Main source of revenue for Washio is through customers who pay to get their clothes cleaned.

Here are some details about how Washio earns:

Washio has kept a minimum order of $30.

Delivery fee for orders below $150 is flat $5.99.

Free delivery on $150 and above.

The company does not charge for pick-up.

Washio offers a cookie to customers upon pick-up.

How Washio finds customers

A customer for washio is one who wants to get his/her clothes clean. Washio follows marketing strategies including promotional offers to woo people use its services. Some of these include:

Marketing activities: (Online and offline marketing)

Promotional offers: ($10 off on first order)

Affiliate/ Referral Model ($15 for referring a friend)

Key problems and Solutions

Pick-up and delivery guy retention:

A major problem with any company that hires 1099 contracted workforce is to retain them. Washio offers a good hourly pay to its workers. However, the company has not said that you should tip your pick-up or delivery persons, any tip given by customers to Washio ninjas is entirely kept by them.

Keeping up with scheduled delivery and pick-up times:

In order to provide good services it is really important for Washio that a ninja reaches his destination within the 30 minute time frame scheduled by the customer. Washio makes sure that there are no delays. They place their ninjas all around the city and a ninja has a pre-defined area. The app on workers side is managed so efficiently that orders pop up according to geographical location of the ninja. However, traffic jams or some other things which are out of control might cause a delay on rare occasions. To sort out this problem, Washio sends notifications to the customer informing about the same.

Wrong item delivery possibilities:

Another problem which any on-demand laundry service like Washio may face is to manage each order. There might be chances that your order gets lost in the washing process or maybe your clothes get exchanged with someone’s else. To sort out this problem, Washio processes every order separately which is tracked by the order ID. The delivery man who picks up the cleaned clothes from washer area, makes sure that he collects everything as mentioned in the order.

The Future

Laundry industry has integrated well with technology and Washio is the perfect example of a successful company in this domain. The funding received by Washio shows us the trust of industry experts in this on-demand laundry company. Washio is currently present in 6 cities of USA and will soon spread to more cities one by one. There is no doubt that the business model of Washio has been a clear success and many entrepreneurs are looking forward to create the next masterpiece in this domain.

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